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Question 1: What, in your view, did we learn from the list that the government published in March of this year? The EU legislation that it expects to be in scope of the SPS agreement and how much UK legislation would need to be changed to realign it with the current form EU legislation that we have on the list.
Well, I only count in 75 sections, but I would actually say that every one of these is very detailed. So when DEFRA have written food colourings or whatever, that's a thousand changes inside one of those regulations. So it's not quite only 75.
Organic pet food labelling will cost companies a lot of money because you'll have to change all the laws. The food contact materials is very important because the UK still allows certain types of plastics that have been banned in the EU. We still allow food colourings that have been banned in the EU.
So we've still got food colourings, we've still got plastics, we've still got a lot of the things in this that we allow that they have changed. Because though the UK hasn't changed a lot of its regulations since we left, the EU has changed enormously. They have introduced 15,000 new regulations and over 10,000 directives.
And even Mario Draghi has written a report saying they have far too much regulation. They have regulated everything. So, and DEFRA also makes a very interesting point in this, they have included all the GMO regulation.
So though you were speaking earlier to the earlier witnesses about that, you have to be very, very careful. The EU considers GMO and gene editing to be the same thing. They have talked about changing that, but they haven't changed it yet.
So they will, if they do do, as DEFRA suggested here, introduce these four regulations on genetically modified organisms, that could cancel out a whole new growth area for the UK. So economically, this is a very, very expensive piece of legislation that people aren't looking at. But it'll be expensive for companies rather than for the government, if you like.
Question 2: We've had evidence saying that, well, actually, we're already aligned, because we have to be to sell our products into the EU market. But you're saying that actually, we're not aligned in all sorts of areas. And you mentioned food covering all the rest of it. How does that square?
Well, if you're a person who sells goods to the EU market, you're a very rare beast up there with conservatives in Scotland or whatever, pandas, because only 1.3% of UK exports are agricultural goods going to the EU. It is a tiny, tiny part of our economy. But if you're an exporter, it's 100% of your life.
So you will come here and say, oh, this is so important. But that means to them, what exporters are trying to do is to get the public to pay their costs. Because that's what happened when we were members of the EU.
Our membership fee meant that our exporters didn't have to pay anything to export to the EU. They did pay to export to the US and to export to China and to export to all sorts of other countries. And they didn't mind that.
But they seem to take umbrage with the fact that they now might have to pay the same cost to export to the EU. So this is just a group of companies trying to switch their private costs into public costs and keep their private profits, if you like. So yes, I'm sure they told you that.
But to coin a phrase, they would say that, wouldn't they? In terms of the economy as a whole, it's a tiny, tiny section.
Question 3: In terms of the economy as a whole, in the context of the rules of which we would have to align in the SPS agreement, what percentage of that bit of the UK economy exports to the EU as opposed to elsewhere?
Well, our entire agricultural exports to the EU were only 12 billion pounds last year. It is absolutely nothing.
And what you will find is anyone who is exporting to the EU is already aligned. So there's actually no need for the rest of the country to align. Because if you are exporting there, you have to be aligned.
And you will notice often they align for all of their products. So many drink containers now, the bottle top is connected to the bottle. This is an EU law.
But if someone was exporting a lot of goods to the EU, they adopted it here as well as there. But a lot of other drink containers have now turned plastic bottles into aluminium cans. And that is a UK law.
So they've aligned with the UK regulation, if they've done that. So it really depends on where your market is. But most of our food is domestic.
Because we import now 35% of all food eaten in the UK is imported. So we can't even supply our own domestic market. So the idea of us having lots of surplus food to export is not actually how it is.
One of the earlier witnesses did mention carcass balance. And you will find one of our biggest meat exports to the EU, for instance, is what most people here would probably call offcuts. So to make more money, they sell the prime meat to the UK market.
But the legs will go to Italy for Osso Bucco. The tail might go to somewhere where they make oxtail soup. And the brisket might go to some country that likes eating brisket.
So you can see that in the trade statistics. Edible offal is a very big export. We export the tripe and the livers and all of that stuff.
But it's not a valuable export. We eat the prime meat ourselves.
Question 4: What are the most significant potential provisions of the SPS agreement that we should look out for when it's published? And perhaps also you can make reference to what might also be in the associated legislation, because we haven't seen that yet.
Well, I think the most significant… We have already touched on the GMO situation, because it is something that we are developing. It's become a new industry for us. It is worth more and more, and we have the potential to develop new crops and export them around the world, but we'll find that we can't even use them ourselves if we're not careful. But we also have to have a way of stopping diseased meat coming in from the EU.
It is so important. They have the worst health in animals that I've ever seen, and DEFRA publishes this stuff. This is their latest report on African swine fever in Europe.
They have a very handy list of all the outbreaks over the last three years since we left, like four years. They've already got outbreaks in 2026. They have a nice map where you can see where they are.
They're in their pig population. They're also in their wild boar population. If there is no restriction on any animal coming across the channel, which is what they're proposing, this will be in the UK in nanoseconds.
It is incredible that we would even consider this. You must have some kind of full stop. You must have the ability to actually be able to stop this.
They also had, I think it's seven outbreaks of foot and mouth disease in the EU last year, and there have been two so far this year, one in Greece and one in Cyprus. This is potentially incredibly dangerous to the UK's already ailing farm agricultural industry because we are a domestic producer. The other side of this is the regulation idea is also a nonsense because we will have zero ways of enforcing it.
How on earth will you know if a farmer that is currently using a pesticide that the EU just banned or the EU just lowered its MRL on? We don't have the ability right now to check. Unless we're going to employ an army of people to run around and check farming, unless you're exporting those goods to the EU, they're never actually going to be checked. It's just another example, just like the EU has killed itself with overregulation, they want us to do the same thing, bring a lot of regulations that they have no ability to enforce, which is why they have, despite their incredible rules on animal husbandry, they have these incredible breakouts of African swine fever and of foot and mouth disease, even though if you read their regulations, their regulations are fabulous.
Question 5: How far is the EU moving on SPS at the moment, and what factors are driving that, but also the extent to which the UK and the EU are diverging?
I think that we've diverged a lot. In farming, we got rid of some really crazy rules like the three crop rule, which affected the UK more than any other European nation, because we had larger farms.
Because the three crop rule only kicked in if you had a farm over 30 hectares, and the average farm in the UK is 81 hectares, and the average arable farm, where you're growing crops, is much bigger than that. So it really affected us. It meant that at maximum, you could only grow 75% of your land could be used for the most profitable crop, and most farmers like to always grow the most profitable crop.
So we got rid of that one the moment we left, and even the EU has now changed that one, but they've changed it in a different way from the way we've changed it. So that has happened in quite a few areas, but in general, the EU has just increased its amount of regulation, and we haven't to the same extent. So we have changed a few things, but in general, we've stood still, if you like, so we've still got the regulation we had when we left, and they are the ones that are moving away from us.
And that is, I think, why they are enthusiastic that we should join them, because introducing these rules would really be a country introducing rules to protect its suppliers. We would be protecting our import suppliers rather than protecting our domestic producers, or protecting our domestic customers, our domestic consumers. And it is a very strange, I've never known any other country, and this is also put on record, I cannot think of any country, developed or undeveloped, that has ever allowed, ever made rules that protect its suppliers rather than protecting its producers.
And that's what we would be doing here.
Question 6: How likely is it that participation in EU decision shaping will actually confer real useful influence on the UK over future SPS regulation, and what would make EU and UK influence effective as an arrangement as opposed to less so?
I would say that the most effective thing we have to influence EU regulation is our purchasing power. We are a very big market for various EU countries. If you look at EU statistics as a whole, we don't buy that much from all of them, but we buy 50% of all of the beef that Ireland produces.
We are a much bigger customer than their domestic market. We are Lurpak Butter's biggest customer. So Denmark provides us with butter and pork.
The Netherlands provides us with vegetables. So there's three or four countries that are hugely dependent on us buying their goods. So if we were to change our regulation, they would change as well if they could, but they can't because their regulations are made by the EU rather than domestically.
So they would prefer us to change to them, which would lock in their market share, which is obviously what anyone would do if you had the power to do it.
Question 7: Do you think it is possible to exert real influence under the sort of agreement we're talking about, which would preclude the sort of thing you've just been saying?
No. The whole point of this agreement is to give away our influence. The whole point of aligning dynamically is that we will no longer be able to influence any decision. So it's silly to then ask for it.
But if you search on AI and say, find me an example of when Norway or one of the EEA countries has been able to assert any influence, you will discover the only one it could come up with was that the Norwegian managed to get a truck legislation changed because they don't make trucks. So it was for heavy goods vehicles that were meant to be made in the country. So they had made in the country taken out of the legislation.
So that is not what I call influence. That is just someone saying, oh, sorry, this law doesn't apply to us because we don't make trucks. So you may get that kind of influence if you're lucky.
Switzerland has almost no influence because it is a landlocked country where food getting to Switzerland cannot get there other than drive through an EU nation. And it is also a major highway for food going from Italy to Germany, and Germany back to Italy, and France to Austria. So that if it was to not align with EU rules, there would be traffic jams heading across the whole of Europe with trucks trying to get through Switzerland.
Or in fact, it would be quicker to drive around it, I suppose. And so they have aligned. But there is no reason for us to do so.
Because though we do provide a land bridge between Ireland and France, most Irish food stops in the UK. In fact, it stops in England. It never gets to France.
And you can also see that in the trade statistics.
Question 8: If the EU is proposing to change some legislation in this area because of considerable pressure, let's say from French farmers or German producers or something like that. Is it not the case that it would be very difficult for the UK, if it took a contrary view, to have any real influence over the direction of EU travel on this?
We have a great example because we were members for a long time and we can look at various examples where we were able to have no influence.
And one of them was brought up earlier about the BSE crisis in the UK because the EU refused to allow the UK to export beef for about 10 years after the crisis had ended. And we had completely decimated our beef herd and restocked and they still wouldn't allow the beef to be exported into any EU country. So, we have some really good examples of when we had zero influence and we were members.
Question 9: What should the key requirements be of a system for parliamentary scrutiny of dynamic alignment?
I would have said that, I think I've said it already, there is really no scrutiny of dynamic alignment. That's the point. You're dynamically aligning whatever they do, you're going to do, and you're going to do it when they do it.
But if you were going to have any scrutiny, you really need to scrutinise something before it comes into place. You need to be able to look at it before you accept it. So, you have to have a kind of a kill switch.
And so, you scrutinise it after they've agreed it before you adopt it in the UK. And I don't think that's going to be on the table. I think that what the government is presently agreeing to is that we will have no scrutiny powers, and we will just adopt whatever they do when they do it.
But if you were going to scrutinise something, you must look at it before you adopt it. Otherwise, there's really no point.
Question 10: Do the principles by which exceptions or further negotiation takes place need to be nailed down so that you know exactly how you're doing it, how disputes will be resolved and so on. As well as some of the specifics for not all, which I think goes to the point of leaving open the fact that things will change and that we will need to have the capability to be able to negotiate extra things in the future.
Could I add something to that? If you actually read the EU's documentation on this point rather than the UK's, the EU is very specific that we will follow their laws and they will adjudicate. So any dispute will be under the auspices of the ECJ and we will not have, as in most trade agreements, I wasn't introduced as such, but I was on the Trade and Agriculture Commission's Trade Agreement Scrutiny Committee, and every agreement the UK has signed since Brexit, you have an independent adjudicator in any disputes. This is one of the very rare, in fact I would suggest only, probably only, not only in the developed world, but in the whole world, where you've allowed one side of the arrangement to legislate in any dispute. So it's a very peculiar idea. We are joining the EU's regulation. We are not going to get a say, we are not going to… And the EU has written this, it's published, it's not a secret, they're not hiding it.
Question 11: What is your view of the various assessments that have been made of the economic and GDP impact of the SPS agreement? That's the first part of the question. And also, the government has suggested that the benefit of the SPS agreement will be roughly £5 billion, as the figure talked about. How does that compare, in your view, to the potential costs of the agreement? I'm thinking of things like the contribution to the EU's social cohesion fund of £1 billion and also the potentially adverse impact on the UK's growing GMO and precision breeding sector and also the wider impact on sectors that follow SPS rules.
There are two lots of costs. You've got a public cost, where we will be asked, if we have to pay as much as Norway, we will be paying on the same proportion, not as much. We'll be paying more than them, but proportion. All EU charges, and I'm sure they'll support me here, are done on your GDP.
And if it's a proportion of our GDP, we will pay at least £700 million a year for the pleasure of being part of their SPS agreement. However, there is another cost. There will be a huge cost to our businesses, as I mentioned in my first answer, because all of our businesses will have to change everything from their packaging, from where they put their nutrition values, from how they measure their nutrition values, to the pesticides they use, the pesticides they can't use. And even if they don't export to the EU, they have to change that. The idea that it will increase our exports to the EU or increase our GDP by £5 billion is made up. That is fake.
The original assessment by the Prime Minister's office was £9 billion by 2040, and the popular press has just dropped the by 2040. If you divide the £9 billion by 2040 up into 15 years, because this was published last year, about a year ago today, it's about £600 million a year. So we're actually going to be costing us more to join than we would actually get back, according to the Prime Minister's office's calculations.
However, that does not take into account the cost to business, and the other thing it doesn't take into account is the cost to our farmers, because everyone seems to have forgotten that all EU farmers are still subsidised. So our farmers stop being subsidised, and the DEFRA now actually subsidises farmers for taking land out of production. So we actually are paying farmers to produce less, which of course has pushed up the price for the farmers who are still producing.
But they will suddenly have to compete freely with EU farmers that are being subsidised, so that is going to have astronomical effects on our whole agricultural markets. So it's a very… The costs come in all sorts of directions, and most people are just looking at the public cost, and as you're part of the government, I understand that you should be most interested in the use of public money, but I think you really have to look at the private costs, because the private costs, rather than increasing GDP by five billion, are much more likely to decrease GDP by five billion, because this is a big cost. We've just asked our manufacturers of food to repackage, to include things like not for EU, if they export anything to Northern Ireland, they have to have a not for EU sticker on it.
We've asked them to change all of their packaging to compete with the way we are doing recycling. So we are doing it on a cost, on a weight, so that the amount you pay for your packaging tax depends on how easily it's recycled and how much it weighs. And this has encouraged a lot of people that used to make drinks in glass bottles have converted that to aluminium cans.
A lot of plastic bottles are also being converted to aluminium cans because the plastic is more expensive to recycle. So if you do the calculations, the aluminium can becomes the best way to package a drink. This has cost companies a lot of money. They've had to change their whole mechanism of the factory of how it fills up. Cans are smaller than bottles, so the packaging of transporting those cans to the supermarkets, supermarket shelving, everything has to change to get around this rule. It's cost a lot of money and it's a one-off hit, so people have done it. But now the government is going to sign this up and the EU would like us to change all of our packaging again to meet EU rules, which are completely different because they have introduced packaging where they still use plastic, but the types of plastic you're allowed to use have changed and the amount of recyclable plastic that you must use must be over 30%. So all of these are cost to businesses and it is kind of incredible that the government seems to be uninterested in how many times they ask businesses to change things and every change is a massive cost. And I think that is the cost we should be worried about rather than the £700 million a year, but we will be asked to pay £700 million a year and no one seems to be mentioning that.
